Editorial 1: A new economics for a new world
Introduction:
- Indian government is grappling with three economic challenges at the same time:
- Management of inflation, interest rates, and exchange rates, for which the Reserve Bank of India is expected to find a solution.
- Negotiating bilateral and multilateral trade agreements that protect the interests of India’s farmers and workers, for which coordination is required amongst the Ministries of Commerce, Industry, and Agriculture.
- Lack of secure employment with adequate incomes for citizens, which requires the involvement of all Ministries and State governments. The third issue is linked with the other 2: it has become a principal cause of social tensions and political conflicts in the country.
- Economists do not have a systemic solution for this “poly-crisis”. Consensus among them has broken down even about solutions to its separate parts. They are divided on whether central bankers should operate independently of governments; whether inflation should take precedence over employment; whether imports should be made less costly for consumers or protection of workers’ incomes should take precedence to increase their purchasing power; and who is hurt by the depreciation of the rupee.
Lessons from China
- Economists agree that more investments will boost growth. Therefore, there are lessons in China’s history. China and India opened their economies to global trade around the same time, some 35 years ago. Both countries had similar levels of per capita incomes then, and similar levels of industrial technologies. Since then, China attracted foreign investment that was many times more than in India, and the incomes of its citizens increased 5 times faster.
- Since wages in China have become much higher, India seems well-placed to attract global investors. To attract investors, India must compete with other countries. Vietnam is often cited as a country that is proving to be more attractive than India to western and Japanese investors. Therefore, after China, economists are turning towards Vietnam also to understand why.
- Western neo-liberal economists have attributed China’s remarkable economic growth to its adoption of free trade policies, and they seem to see only this as a cause for Vietnam’s recent spurt. When both countries opened to foreign investors — China before Vietnam — they had already attained high levels of human development, with universal education and good public health systems.
- Whereas even 10 years ago in India, trade-and-growth economists like Jagdish Bhagwati were dismissive of economists like Amartya Sen who advocated the human development theory of growth. Jagdish Bhagwati said the size of the economic pie must be increased before it can be redistributed. They had the order wrong.
- Basic human development must precede growth because it is the means for growth. Moreover, incomes must be increased simultaneously to enable more consumption and attract more investments.
The problem with the current paradigm
- The clock cannot be turned back. India’s policymakers will have to find a way to strengthen the roots of the economic tree while harvesting its fruits at the same time. There are some fundamental flaws in the current paradigm of economics.
- Economists often cite Tinbergen’s theory, which states that the number of policy instruments must equal the number of policy goals. This justifies the necessity of independent monetary institutions for:
- Managing inflation
- Separate trade and industry specialists
- Separate policies for environment management and agriculture.
Crises and the inadequacy of the system
- Macro-economists search for global solutions. Trade and monetary policies that fit the United States, China, Vietnam, or India will not fit the needs of others. Their needs have emerged from their own histories. Indian economists complain that bad politics is coming in the way of good economics. Whereas bad economics could be coming in the way of harmonious progress of the country !
- Einstein said that working harder to solve systemic problems with the same thinking that caused them is madness. Global solutions and economic theories invented in the West have caused problems, for which new solutions are essential. The inadequacy of the current paradigm was revealed by several crises in this millennium: the 2008 global financial crisis; inequitable management of the global COVID-19 pandemic; and the looming global climate crisis. Clearly, one solution cannot fit all.
Conclusion:
- ‘Vasudhaiva Kutumbakam’ (One Earth, One Family, One Future) is the theme of the G-20, which India is leading this year. A new economics is required. A movement to change the paradigm of economics’ science to bring perspectives from the sciences of complex self-adaptive systems has begun even in the West. India’s economists must step forward and not just follow these developments. They must lead them too.
Editorial 2: In controlled digital lending, the issue of public interest
Context:
- An ongoing legal tussle in the United States between four major publishers and the internet archive (IA), has, once again, posed a fundamental question about the interface of copyright law and technological advancements — should copyright law protect the broader public interests or the commercial interests of the copyright holders?
Internet Archive (IA)
- It is a not-for-profit organisation trying to build a globally accessible digital library. Within a short span of time, the IA has become a truly global digital library to access information, particularly for persons with disabilities. A substantial portion of the books digitised by IA are outside copyright protection and are accessible without restrictions.
- Publishers have alleged that around 3.6 million books, which have also been available to borrow under some conditions, are actually copyrighted. They have been particularly upset by the ‘National Emergency Library’ that the IA set up at the peak of the COVID-19 pandemic, wherein the IA relaxed the conditions for lending.
- The publishers have argued that the IA violated the diverse rights provided under copyright law for many titles published by them. The IA rebutted by arguing that books under copyright protection are lent only in a regulated manner, through ‘Controlled Digital Lending’ (CDL), and should, therefore, be considered to be ‘fair use’ under United States copyright law.
Understanding Controlled Digital Lending
- CDL is a model by which libraries digitize materials in their collection and make them available for lending. The IA’s CDL model follows the lending approach generally seen in physical libraries, where if one copy is owned, that copy can be loaned to one person at a time. So, the IA avails one digital copy of each non-circulating print book it has stored.
- Also, irrespective of the number of physical copies of that book that libraries participating in the IA’s digitisation project own, for the purpose of digital lending it counts as only one additional copy per library.
- But in a decision that can have far-reaching consequences for the future of CDL, the district court for the Southern District of New York (SDNY) has ruled in the motions for summary judgments that the IA’s activities violated various rights vested on publishers under copyright law, and that the activities do not constitute ‘fair use’ under the same law.
CDL and the public interest
- Conversations with librarians indicate that lending physical copies of books from libraries, including at India’s leading universities in India, has been on the decline. But that does not mean the demand for reading books is going down so much as that people’s reading habits are changing. Closing physical libraries at the height of the pandemic may have just accelerated this shift. Today, many people prefer to read books on devices such as their smartphones and tablets.
- The CDL is a positive response to this trend; it also helps bridge the gap between urban and rural, and the privileged and unprivileged, readers vis-à-vis access to books, because it allows even people in the remotest villages to access books from libraries that are far away.
- It is also evident that CDL initiatives ease access to many books that may have gone out of print or may not be available to access in many physical libraries.
India and CDL
- Though India is yet to have a major CDL initiative, some universities such as the NLSIU have initiated major digitisation projects that can facilitate CDL in future. The outcome in the IA litigation will in turn have considerable ramifications for such initiatives, in India and elsewhere.
- In addition, even current lending practices in physical libraries could be threatened if other courts followed the SDNY district court’s logic, in prioritising the economic interests of just one of the stakeholders over the broader public interest.
Conclusion:
- It is high time to remind ourselves that the copyright system is not just about protecting the interests of copyright holders, but, equally, about protecting the rights of the users of copyrighted works, and thus the broader public interest.